ROYAL Bank of Scotland’s latest “technical glitch” problems, meaning account payments have gone missing for many of its customers, will test the credibility of chief executive Ross McEwan’s claim that the group is now a “safer, simpler” bank.
It also won’t impress the City regulators. The Financial Conduct Authority and Prudential Regulation Authority fined taxpayer-backed RBS a total of £56 million late last year over its embarrassing computer software failure in 2012 that left millions of customers unable to access their accounts.
The bank acknowledged publicly the earlier breakdown was unacceptable and caused significant stress for millions of account holders.
That happened on the watch of McEwan’s predecessor Stephen Hester, whose main focus following the near-demise of the bank in the crash was in clearing up the financial mess, even if that was not an excuse.
By contrast, McEwan’s main priority has not been the balance sheet and asset disposals, but operational issues, restoring customer faith in RBS’s basic processes. As such, the latest glitch, which has also affected its NatWest, Ulster Bank and Coutts subsidiaries, is highly embarrassing.
The bank said yesterday that a problem with its “overnight process” meant 600,000 customer account credits and debits went missing. The Twitter-sphere went ballistic with worried customers venting their frustration after waking up to find payments missing from their accounts.
By mid-morning RBS said the problem was still ongoing, and it was working on it.
The bank advised customers to telephone its call centres or – in a quaint touch – pop into their local branch if they had any concerns.
Many will have done, as confusion around RBS’s software seems to reign once again. The bank has promised that no customers would be left out of pocket by the latest electronic debacle, which while welcome is a given.
Meanwhile, those customers (and regulators) will have a sense of deja-vu at RBS’s apologies for the inconvenience
JD Sports gets into European fashion
THE strong start to its new financial year by sportswear and outdoor goods retailer JD Sport Fashion is all the more creditable given the tough comparatives and the fact that a distinctly cooler May has been unhelpful for clothing sales.
Despite the currency headwinds of the weak euro, JD’s sales in Europe are going well, particularly at its Sprinter sporting goods business in Spain and France’s Chausport.
An added boon for the group across the Channel is that it has built critical mass.
As such, it is seen as being well-placed to be one of the consolidators in the European consolidation game that is viewed by many sector analysts as inevitable.
There are too many niche players in the European sports fashion clothing sub-sector, and they are likely to be mopped up.
Meanwhile, JD has good potential on its home turf in the UK to broaden its offering and increasingly use the margin-friendly channel of larger stores (a strategy executed successfully by the group’s rival, Sports Direct).
The first 19 weeks of JD’s financial year will have reassured a lot of its City following that the growth trends seen in previous quarters, particularly in notably strong demand for sports footwear, look sustainable.
The company looks to be a stylish growth story, not a jaded, mature one.